Meet The Asian Investors Who Are Keeping The London Market Afloat
Asian investors are keeping Central London investment from turning into a desert.
Investors from the region invested £4B in Central London in the first half of 2017, accounting for 46% of activity, according to data from Cushman & Wakefield. That is the highest-ever H1 figure for Asian investors, and compares to about 22% in 2016.
These investors have been enticed by the drop in the value of Sterling, and tend to have a low cost of capital, a long-term outlook and a desire to get capital out of home markets.
“There are push and pull factors behind all global capital flows, so the recent high-profile visit to Hong Kong by the Chinese president to mark the 20th anniversary of the handover is a timely reminder of the region's impact,” Cushman head of London Capital Markets James Beckham said.
So who are the key firms and individuals keeping the London market afloat? Say hello.
1. CC Land
CC Land set the high-water mark for London acquisitions this cycle with its £1.15B acquisition of the Cheesegrater office tower in March, the second-highest price ever for a single U.K. office building. The company is listed in Hong Kong, but 50% is owned by Chinese mainland native Cheung Chung Kiu. He is a self-made billionaire who made his money primarily in property and has diversified into transport and other trading, particularly in Hong Kong, where he now lives.
CC Land also bought One Kingdom Street in Paddington from TH Real Estate in March for £292M, meaning it accounted for 16% of Central London investment volumes on its own. It also bid on the £1.2B Walkie Talkie.
2. Lee Kum Kee Group
Oyster extract, sugar, salt and corn starch. They are the ingredients that make up classic Oyster Sauce, a recipe that has made China’s Lee family wealthy enough to be a big bidder on Central London buildings of £1B or more.
It has not done a deal yet, but Lee Kum See Group lobbed in a £1B unsolicited bid on the Gherkin earlier this year, and is reported to be in talks to buy the Walkie Talkie building for £1.2B, if it can persuade 50% owner Land Securities to sell its share.
The company was set up in 1888 when chef Lee Kum Sheung invented the sauce, and has grown to encompass an empire of condiments and food, Chinese medicines, mobile telecoms and property.
3. China Resources Land
The Chinese state is also buying into London on an arm’s-length basis. China Resources Land is part of the state-backed China Resources Group, and in May it teamed up with listed group NorthStar Realty Europe to buy 20 Gresham St. in the City of London for £310M. At home it is a developer of offices and residential, from regular housing to high-end luxury apartments.
4. Emperor International Holdings
Emperor International is another Hong Kong-listed company, with a market capitalisation of around £1B. In January it purchased the Ampersand building in Soho for around £260M from fellow Hong Kong firm Peterson. Although it is listed it is part of a good old fashioned conglomerate. Chairman Albert Yeung has a net worth of around $1.5B, and like Lee Kim See his family’s wealth grew from very humble beginnings — his father set up a watch shop in 1942. Emperor is still involved in the watch and jewellery trade but has branched out into real estate, financial services and furniture, among other businesses.
5. Sea Holdings
Hong Kong-listed SEA was one of the first overseas investors to buy into London post-Brexit, with the £160M buy of 20 Moorgate in the City, and it backed this up with the £260M acquisition of the nearby 33 Old Broad St. It started as a property company in the mid-1950s and has pretty much stuck to its knitting ever since, and was an early outbound Asian investor — it bought into Vancouver in the late 1980s and New Zealand and Australia in the 1990s.
6. Sinar Mas
Indonesia’s Sinar Mas conglomerate bought 33 Horseferry Road in Victoria from Brockton in June for £219M. It is the second major acquisition it has made in London in the past few years — it bought the Alphabeta building on the edge of Shoreditch from Resolution Property for £280M in 2015. Sinar Mas was set up in 1962. One of its big businesses is palm oil, and in 2010 it was heavily criticised by Greenpeace for destroying forests that were home to orangutans. It pledged to reform its practices.
7. Pansy Ho
Pansy Ho is Macau royalty and one of its most successful business people. She is one of the 17 children of Stanley Ho, who for decades had a monopoly on the Macau casino and gambling scene. She took over many of the family companies in the early 2000s, including Shun Tak, which owns the family's property. She is the biggest shareholder in MGM China and owns 29% of the MGM Grand Macau. In March she bought 8 St. James's Square from Green Property for £213M, a record price per SF for a London office.